After nearly a decade of trying, Apple finally gave up its effort to produce an electric car last year, canceling a project that soaked up $10 billion.
But last year in China, the electronics maker Xiaomi launched its first electric car after just three years of development and delivered 135,000 vehicles. It has vowed to double that number in 2025.
Xiaomi’s ability to succeed where Apple could not shows how thoroughly China has come to dominate the supply chain for electric vehicles. Chinese companies have mastered electric vehicle manufacturing. By tapping that infrastructure, Xiaomi was able to get components quickly and cheaply.
More Chinese electric vehicle companies — including Leapmotor, Li Auto and Seres Group — are starting to turn a profit after burning cash for years in their intense competition for the world’s largest auto market.
And Xiaomi is not the only Chinese consumer electronics company that has branched out to electric vehicles. The telecommunications giant Huawei, which the U.S. government has targeted with sanctions and legal action for years, is making autonomous driving software. Huawei has teamed up with multiple Chinese automakers, including Seres Group and the state-owned firms SAIC Motor, BAIC and Chery.
Xiaomi has long been compared to Apple. It made bets that its rivals rushed to imitate, like selling its low-cost, high-design phones mainly online. Its chief executive, Lei Jun, even dressed like the Apple co-founder Steve Jobs, in jeans and a black shirt, for Xiaomi’s first phone launch in 2011.
Xiaomi’s first electric car was brought out last March: the SU7, a four-door sedan with artificial intelligence features that can help with parking, play movies for passengers and program Xiaomi home appliances from the road. Mr. Lei said it looks like a Porsche. But at $30,000, it’s a quarter of the price.
Xiaomi makes all kinds of electronics, from robot vacuum cleaners to air-conditioners, which are connected through its operating system and controlled in its app. The SU7 is, in some ways, just another gadget. It can use data collected from other devices about a driver’s daily routine to determine the best time to charge the car’s batteries.
“Xiaomi has really started infiltrating your home,” said Gary Ng, an economist with Natixis Corporate & Investment Banking. “Everything is linked together, and this is something other companies couldn’t do.”
While the SU7 earned Xiaomi just a small fraction of the sales of China’s top electric vehicle makers, it puts Xiaomi among the Chinese companies that are dealing a major blow to foreign automakers’ long command over China’s market for premium cars. In the year since the SU7 went on sale, Porsche deliveries in China were down nearly 30 percent.
On Thursday night in Beijing, Xiaomi released a high-end version, the SU7 Ultra, alongside a premium version of its latest smartphone. The company staged a flashy teaser for the car by racing a prototype around Germany’s Nürburgring racetrack, where, Xiaomi said, it set a record for “fastest four-door sedan.”
Xiaomi also plans to release a sport utility vehicle, the YU7, this year, according to regulatory filings in China.
Chinese electric vehicle companies have benefited from billions of dollars in government support, which has helped them gain control of the supply chain down to the very minerals inside the car batteries. This early edge helped two Chinese companies, BYD and Contemporary Amperex Technology Company — known as CATL and added to the Pentagon’s list of Chinese military companies in January — become the biggest electric battery makers in the world.
Xiaomi used this supply chain to its advantage. Its cars contain batteries from BYD and CATL. It was able to quickly start production by taking over a factory from Beijing Auto Group. Construction workers in Beijing are working around the clock on a second factory.
All this manufacturing capacity helps Chinese electric vehicle firms move from development to production in far less time than traditional automakers in China, enabling them to bring new models to market quickly and focus on making software that they can continually update, said Stephen W. Dyer, head of Asia Automotive at AlixPartners, a consultancy.
Intense competition at home has pushed many Chinese carmakers to flood the global auto market with affordable electric cars. Last year, BYD sold more than four million new cars worldwide.
It is just a matter of time before Xiaomi cars are on the road outside China, said Cui Dongshu, secretary general of the China Passenger Car Association.
Xiaomi’s popularity as a maker of all kinds of consumer electronics gave it a deep well of knowledge about Chinese consumer preferences. On the first day SU7s were delivered, buyers could go to Xiaomi’s app store and get accessories to trick out the cars, like analog dashboard clocks and a row of physical switches that attach to a touch-screen panel.
“The strength of the brand puts Xiaomi ahead of a lot of their competitors,” said Tu Le, a managing director of the consultancy Sino Auto Insights. “That’s what it takes to sell cars globally, because it’s not just a consumer product, it’s an emotional product.”
